MUMBAI: RBI raised its growth projections and lowered inflation estimates while the monetary policy committee voted unanimously to keep the repo rate unchanged at 5.25% and retain a neutral stance, signalling no immediate rate hike this year despite concerns among forecasters.“There is a need for greater clarity to emerge, especially regarding inflation, its path and composition before taking any policy action,” RBI governor Sanjay Malhotra said, even as the MPC revised the core inflation forecast for FY27 downward by 40 basis points to 4.3% from 4.7% made in June 2027.The central bank reiterated the same set of risks, citing the resumption of West Asia conflict, deficient or uneven monsoon conditions amid El Niño, and sharp two-way movements in global oil prices. According to Soumya Kanti Ghosh, chief economist, SBI group, the policy communicates less uncertainty and is more dovish compared to the June statement.
“Clearly, the RBI policy statement pushes out any rate hikes in FY27 with inflation also remaining benign at 5% and core inflation at 4.3%,” said Ghosh.RBI said underlying demand pressures remain benign. It noted that core inflation excluding precious metals stood at 2.3% to 2.5%, while headline inflation pressures were driven largely by supply-side factors such as food and fuel rather than broad-based demand. Overall CPI inflation was reduced by 10 basis points to 5.0%, after Q1 inflation came in 30 basis points lower than earlier estimates due to limited pass-through of cost pressures.The governor said that real GDP growth for 2026-27 is projected at 6.7%, with Q1 at 7.0%, Q2 at 6.4%, Q3 at 6.5%, and Q4 at 6.8%.
